Structure choice and equilibrium analysis on high timeliness merchandise distribution channel

This paper addresses the pricing decision of the high timeliness merchandise under dynamic uncertainty, and investigates three different dual channel structures including retail channel, online channel and name-your-own-price (NYOP) channel. Firstly, this paper develops the aggregate demand function based on consumer utility theory, then analyzes the equilibrium pricing strategy and profit under different channel structures by using game theory, exploring whether the supplier should introduce online channel or NYOP channel. The results demonstrate that online channel structure enables supplier to obtain more profits than retail channel structure. For traditional retailer, the dual channel structure including NYOP is optimal when the consumer friction coefficient is not greater than four out of five consumer transportation coefficient.